Health insurance is a very important part of your everyday life. It helps to ensure you're protected in case of an accident or injury, and allows you to take advantage of several choices in the care you receive. Sometimes, your insurance plan seems so complicated that all you do is continue to pay the premium without double-checking if it is the best fit for you. There are a number of important points to keep in mind when choosing and using your California health insurance plan.
Deductible and Co-Insurance
Every California health insurance plan has a deductible, and many consumers mistakenly think they truly understand what this dollar amount means to them. Yes, the deductible does mean that you are responsible for this amount before your insurance coverage will start sharing the costs with you. However, a $500 dollar deductible does not mean that you will only ever pay $500 and nothing else for your health care expenses.
After your deductible amount is met, you share a set amount of costs with your insurance company. This shared amount may be a 100% plan where the company pays everything, or more likely an 80/20, 70/30 or even 50/50 split with you. This co-insurance only applies to a certain dollar amount in expenses, such as the next $5,000 or $10,000 after your deductible is met. After that, your insurance company should cover accepted expenses 100%. This level of exposure that you are willing to bear will directly affect your possible expenses as well as your premium amount.
Additional Out-of-Pocket Expenses
Your health insurance company will also determine what types of charges are fair and reasonable for specific types of service, and any dollar amount over that will be your responsibility. For example, if your insurance company determines that $45 is a reasonable charge for an office visit but your doctor charges $60, the remaining $15 will be billed to you and inapplicable toward your deductible or co-insurance costs.
Choice in Caregiver: HMO vs. PPO
One of the biggest choices to make when enrolling in a new health insurance plan is whether to choose an HMO or PPO plan. HMO plans tend to be a little less expensive, but are also more restrictive. Coverage may only extend to specific providers, and if you visit a doctor outside of the designated network you typically will be responsible for any and all charges incurred. In addition, you may be required to obtain specific referrals in order to visit any type of specialist practitioner.
PPO plans are much more flexible. These plans have preferred providers, but can be used anywhere. If you visit a doctor or hospital outside of your network of preferred providers, your insurance plan will still apply-you will just be responsible for more out-of-pocket and possibly higher co-insurance expenses. For example, your PPO plan may provide an 80/20 co-insurance plan when you're in-network, but only 70/30 if you travel outside of the network. This way, you can always still remain with your preferred doctor, and can easily seek care no matter where you are located at the time.
Limits and Exclusions
An important point to note about your health insurance plan is what type of exclusions and limitations apply to you. Every policy contains a section that is title "Exclusions and Limitations," and will outline for you the circumstances in which you may not be covered.
Exclusions may include such things as cosmetic or elective surgeries, experimental treatments and even pre-existing conditions. Pre-existing conditions are those which you may or may not have disclosed to your health insurance company when the plan was issued. This could include tobacco or alcohol use, kidney stones or asthma. In addition, if your plan is merely covering major medical expenses, dental and vision care will be on your list of exclusionary expenses.
Limitations place specific limits of coverage on certain types of treatment. For instance, you may notice a limit on ambulatory transportation for $1,400. Or, air transportation limits may be set at $5,000. You'll also want to understand lifetime limits for each person on your plan. Many times, this lifetime limit is somewhere between $2 and $5 million. These simply means that should anyone on your plan ever fall ill and require significant health care, the insurance company will not provide benefits over this amount during the covered party's lifetime.
Understanding these aspects of your California health insurance plan will help you to decipher your choices in care, prospective costs and reasons you may receive bills for visits and treatments you once thought were covered under your plan. This will only help you to be better prepared in the case of a future emergency or need to change your current plan.
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